In this week's From Paychecks to Purpose episode, I continue answering beginner personal finance questions with my friend, Pink! In Pt. 2, we discuss beginner-level considerations for real estate, as she is just beginning to think about it from an investment perspective. From primary residences to rental real estate, hopefully this will give a primer on how to think about it. In Pt. 1 linked below, we discussed 401ks, asset allocation, and whether to buy individual stocks.

Disclaimer: This is a conversation between friends for entertainment purposes only, and is not financial advice.

Part 1: https://open.spotify.com/episode/6FAaWMXCZv2eCokwQGP90h?si=bFOKnG4iQHy9uoAhqkPGvw

Rent vs. Buy Calculation: Home Price / 12 months of rent

Ratio of 15 or lower: consider buying if it makes sense

Ratio of 21 or higher: it is cheaper to rent and invest the difference

Ratio 16-20: a gray area where neither is dramatically better than the other

Rent vs. Buy Article: https://moneywithkatie.com/when-the-math-supports-buying-your-primary-residence-instead-of-renting/